Flipkart co-founder Sachin Bansal’s second startup Navi Technologies is set to take the next big leap, something that Flipkart is yet to do.

• Navi Technologies has received a nod from markets regulator Securities and Exchange Board of India (SEBI) for a Rs 3,350 crore Initial Public Offering (IPO).

The move comes as a shot in the arm for Bansal as he looks to build a financial services conglomerate.

In today's newsletter:

• Amazon India gets into better shape
• WazirX gets a breather
• The aftermath of Lido's fall: It's everyone's loss

Amazon's Indian entities seem to be getting into a better shape even as profitability remains elusive. This comes ahead of a crucial festive season that typically contributes a major chunk of its sales growth.

The revenue of Amazon's five India entities cumulatively grew nearly 60 percent in FY22 to a little over Rs 40,000 crore from a year earlier, regulatory filings showed. However, all these entities reported losses for the year.

• Amazon Seller Services, which operates Amazon India's marketplace, saw a net loss of Rs 3,649 crore in FY22 against a net loss of Rs 4,748 crore in FY21. This was on an operating revenue of Rs 21,462 crore, a 32 percent increase year-on-year (YoY).

• Payments arm Amazon Pay posted a net loss of Rs 1,741 crore in FY22 against Rs 1,516 crore in FY21. Operating revenue grew a little over 16 percent to Rs 1,999 crore in FY22.

• Amazon Internet Services, the entity that runs Amazon Web Services in India, however saw a loss of Rs 2.3 crore for FY22 against a profit of Rs 185 crore last year, even as the company's revenue surged almost 66 percent to Rs 8,956 crore.

These financial losses highlight the tough competition the US-based e-commerce giant faces in one of the world's largest and fastest growing consumer economies.

• Amazon competes with local, homegrown e-commerce and social commerce players in India like Walmart-owned Flipkart, and Facebook and SoftBank-backed Meesho, among others.

Earlier this month, brokerage firm Bernstein had highlighted how Amazon has not been able to generate profit in India even after pouring $6.5 billion in the country through the last eight years. According to the report, Amazon India has negative EBITDA margins of 5-10 percent.

• To be sure, Amazon has been one of the most profitable companies of all time at a global level and is currently ranked number two on Fortune's Global 500 list of companies for 2022.

Cryptocurrency exchange WazirX finally had a sigh of relief.

More than a month after the Enforcement Directorate (ED) froze its bank assets worth Rs. 64.67 crore, the crypto exchange said its assets have finally been unfrozen.

Last month, the ED's statement was followed by a public spat between founder Nischal Shetty and 'formerly known owner' Binance's founder CZ on Twitter, where CZ denied ownership of WazirX and its data.

In a blog post, WazirX said that after a thorough investigation, it noticed that “most of the users whose information was sought by ED were already identified as suspicious by WazirX internally and were blocked in 2020-2021.”

Well, WazirX wasn't the only crypto platform investigated by the ED. Crypto lending platform Vauld also had its assets worth over Rs 370 crores frozen. CoinSwitch too had its premises searched by ED.

• This was a part of a larger investigation where ED is trying to track those platforms which allegedly assisted illegal lending apps in monetary transactions. Not just crypto platforms, fintech gateways including Razorpay and Cashfree Payments too came into its radar.

WazirX, one of the largest crypto platforms in India, is staring at an uncertain future with Binance stopping its support, current regulatory haze in India and break-up of the industry body BACC with parent IAMAI. Hence, investors' trust remains shaken.

The platforms might be recovering slower than ever. But the good news is after a fall of over 80% trading volumes, Indian crypto platforms might start seeing recovery now that token prices have started to go up.

2022 has been a terrible year for edtech companies, with several companies undertaking layoffs among various measures to cut costs. 

K-12 platform Lido Learning - backed by prominent names in the startup street like Ronnie Screwvala, Vijay Shekar Sharma, Kunal Shah and Anupam Mittal, among others - is now going belly up.

On the afternoon of September 8, second-time entrepreneur Sahil Sheth's Lido Learning filed for bankruptcy. What followed was a swarm of phone calls, messages, and even threats from parents and students who had subscribed to Lido's courses.

• These calls were not to Sheth - but to the company's sales staff, most of whom were themselves scrambling to recover their dues from Lido Learning.

On February 5, over 1,200 employees were abruptly told to resign by Lido Learning CEO Sahil Sheth in a virtual townhall as a cost cutting measure.

• This was after the company's aggressive hiring over the last two years and spending nearly half of its revenue on advertising and marketing.

Seven months after the mass firing event, Lido Learning filed for bankruptcy.

Now these employees along with thousands of parents, and many of its creditors are hoping to recover at least a part of their dues from the company.

• Employee dues range between Rs 20,000 to as high as Rs 80,000 each, adding up to as much as Rs 5 crore.

• Parents who have taken loans from Lido's financing partners like Bajaj Finance complain they still have to pay EMIs even though classes have stopped.

The company is yet to receive approval on its filing.

What happens once the NCLT admits Lido Learning's plea? The resolution professional (RP) will look to restructure the company and scout for a buyer. If the restructuring also falls through, they might look to liquidate the company.

In case, they decide to go for liquidation, all of Lido Learning's physical assets and its IP (intellectual property) will be sold to pay off the company's dues.

• An insolvency lawyer however told us he believes shareholders are unlikely to get anything back after liquidation as software companies do not have much other than IPs and basic assets like computers, chairs, and desks to sell.

(Go deeper to know who Lido might repay first)

The Indian digital lending space, led by the Buy Now Pay Later (BNPL) phenomenon, has seen its share of ups and downs to finally being officially regulated by the Reserve Bank of India (RBI) this year.

Even as few fintechs fell out of the race and others are rushing to comply with the new norms, the industry is gearing up for a banner festive season as customers are expected to up their purchases for the festivities.

BNPL players are expecting a rise of as much as 8x in loan disbursals as compared to last year's festive season.

Read the story

• A long-awaited software upgrade to the Ethereum blockchain aimed at slashing its huge energy consumption is expected this week, a move proponents say may widen the technology's use and support the price of the ether token. Also, what happens to Bitcoin, which is currently the dominant cryptocurrency?

• US SEC plans to set up two new offices to provide specialized support to the seven offices currently responsible for reviewing issuer filings.

• Starbucks is the latest to join the Web3 bandwagon. The coffee chain has combined its Starbucks Rewards loyalty program with an NFT platform, allowing its customers to both earn and purchase digital assets that unlock exclusive experiences and rewards.

Spinny was the third startup for Niraj Singh after the previous two had folded. He says the experiences taught him to have a clear vision. That said, the road to becoming a unicorn wasn't easy for the online used-car retailer, founded in 2015 by Singh, Ramanshu Mahaur and Mohit Gupta.

In the latest episode of our show Bits to Billions, Singh talks about growing up in a small town in India, the market for pre-owned cars amid a slowdown and his plans for the EV and luxury car space

• One interesting titbit: Singh says Bengaluru is neck and neck with Delhi when it comes to demand for pre-owned luxury cars.

Watch the episode